The impact of inequality

The previous chapters showed that, both within and across countries, the rich have gained disproportionately from the economic growth of the past two decades. This rising inequality matters, not only for its effect on economic development processes, but also for its impact on poverty reduction, social mobility, social cohesion, political stability, and other aspects of social development. However, as highlighted in previous chapters, the arguments and evidence against inequality as an unavoidable by-product of development are growing. While some level of inequality can be incentivizing, there is growing recognition that too much inequality, and sustained periods of it, can derail economic progress and deepen—or create—the social and economic exclusion of large pockets of society.

Related Subject(s): Economic and Social Development